Transcript of Kevin Warsh *JUST* Bailed out the Stock Market HIMSELF
Meet Kevin
0:00My goodness, I am falling asleep out0:03here. But you know what got me more0:06energy than a double set of monsters and0:10a cup of coffee? It was this sound of0:14notifications0:15coming through about Kevin Walsh bailing0:19this market out. Holy moly. Let me just0:24put it this way and I think this will0:25give a little bit of clarity on the0:27bailout that we just got. Not from Mr.0:29Waller now the dove that's supposed to0:32be neutral on the race setting0:33committee. Uh-uh. Kevin Walsh himself0:36just bailed this market out. And you0:39know how we can tell? I just want you to0:41look at the November0:4315th. Sorry, that's September. September0:4615th, 2027 futures target for rate hikes0:53uh yesterday morning after CPI. So there0:56was before CPI. So we'll do like BCPI.0:59Okay. We sat at about 3.17 hikes that we1:02were pricing in. Then we got CPI. We1:05priced in like 3.8.1:08And this was a day before CPI. We were1:10like 3.7 even before that. Uh and then1:13this morning after the hot PPI, we were1:16at like 3.351:19hikes to go between now and September1:2215th. Right now after these washywor1:25comments we sit at 3.024.1:32In other words, we are seeing the odds1:35of these more or these additional rate1:36hikes from a hot CPI and hot PPI report1:40fade away. I mean in fairness, PPI this1:42morning is like, bro, this is 80% fuel,1:4450% gasoline. This is crazy. But what1:47did Kevin Worshy Worshy just buy? Oh1:51man. Oh man. Oh man. Oh man. Let's go1:54over here to what we call the alpha1:57wire, baby. You could actually get this1:59for free right now in the Meet Kevin2:02app. Uh the whole Meet Kevin app is2:04getting rebuilt between now and the end2:05of the year. So it's really exciting2:06like what's there now. It's just a2:08scratch of uh what it's going to be.2:10It's kind of cool. But take a look at2:11this. Breaking Worsh. This is uh because2:13he had he just gave a speech in uh in2:16Taiwan, I believe it was. But anyway, I2:19I want to go to bed. Be up early2:21tomorrow. But here we go. Kevin Worsh,2:22Fed task forces are charged with2:24creating new intellectual capital to aid2:27the FOMC. Now, this is interesting2:29because remember Worsh talked about, oh,2:32uh, we're going to have information from2:33the task forces out at the end of the2:35year. Well, that kind of implies like2:38December that kind of implies that he'd2:40be willing to wait for the information2:42from those task forces. And then, of2:44course, just because you get the2:45information from the task forces doesn't2:47mean you could instantly implement it.2:49We might be one and done this year, boys2:51and girls. I think that's what Kevin2:53Walsh is saying here is, hey, we need to2:56wait for the task forces. Let's take a2:58look at some of the other things he's2:59saying. The Fed will have a field3:01hearing on artificial intelligence in3:03San Francisco. AI will make the economy3:06more productive. There will be more3:07wealth, but the path there will be a3:10bumpy one. AI will change the real3:13economy, but the near-term impact on3:15employment is uncertain. Ah, now that's3:18a very important line right there3:21because if you have a Kevin Worshy Worsh3:24that says, "Hey, hey, uh, you know, we3:27we got to be careful here, there are3:29potential tailside risks, then if we go3:34too far, if we hike too fast to control3:37inflation expectations that are already3:40controlled, then we could crush the3:43labor market." What did we get the last3:46few days? Remember in the CPI report,3:49worker pricing power down. What do we3:52get on retail sales uh control group3:56this morning? Consumer retail sales x4:00energy and gas missed expectations in4:04that control group. That's just another4:06example where ah crap, wait a second,4:09what what is like are we starting to4:11roll over on the labor market? Because4:13once the labor market rolls over, it'll4:15take about a year for people to start4:16realizing, ah crap, like the4:18unemployment rates going up, you know,4:20it was 42, then it's 43, then it's 44,4:23then it's 46, then it's 48. You know,4:26nobody's going to care if it's 44, 45,4:2846, 47, 48. Even when it gets to 5%,4:31then people are going to go, "Oh man,4:32this is this is really started to go up4:34again. This isn't good." You know, all4:36of that that takes time. that could take4:38a, you know, 12-month period of time for4:40people to actually see that4:41year-over-year change. And so, I think4:43what Kevin Worsh is doing is by saying,4:46look, you know, we've got to be really4:47cautious of these tail risks is why are4:50we going to go super duper aggressive4:53right now on artificial intelligence if4:56inflation break evens are stable? And5:00that's exactly what we're seeing right5:01now. We've got inflation break evens5:04that are substantially down from where5:06we were at the beginning of the year.5:07Not only are we down substantially from5:10the uh beginning of the year, we're also5:12down substantially from when Mr. Worshy5:15Worsh did his uh hikey wy here. I I'll5:19read you the numbers here. So, at the5:21beginning of the year, we spiked all the5:23way up to about 2.56 on the 5-year break5:26even. Uh literally the turn of the year.5:29So, January 1st was closer to where we5:31are now. That's actually at about 2.3.5:33We sit about 2.35 right now. And so5:36within two weeks of the beginning of the5:38year uh two to four weeks we're about5:4025. Then when the war was going on we5:42were sitting at 27 inflation break even.5:45Right before the Fed meeting we got up5:47to 25. They hiked right back down to5:512.35. So sitting around 2.3 on inflation5:55break evens. This is not necessarily a5:57reason to hike again here in October5:59despite the hot data that we've get been6:01getting. I just pulled it up again. And6:03so I think he's recognizing, ah crap,6:05you know, if we go too fast here and we6:07don't give time for either Donald Trump6:09to make a deal, which he's probably on6:11the phone with Trump and Trump's like,6:12"Dude, I'm going to make a deal. Like,6:14just wait. Just wait, man. Like, it's6:15all going to be okay." Uh, I wouldn't it6:17wouldn't I would not put it past Donald6:18Trump to be doing that to give Kevin6:20Walsh this heads up that, "Hey, uh,6:24you know, just can can you guys skip6:27October and then I promise I'll have a6:29deal for you." And you know what's going6:30to happen when we have a deal? you know,6:32rates were going to plummet, right? Of6:35course, that's what's anticipated. Uh,6:37now I want to show you what else was6:39said, but I also want you to see this6:41because I think it's really incredible.6:42This morning on our alpha report, we6:45mentioned that you should buy the dip if6:47we end up bouncing at $715.6:51Look at that, folks. On this chart, we6:53got down to 71585. If you actually look6:56at the minute-by-minute chart, we got6:57down to $7543.7:02Then we bounced. When we started7:04bouncing over here, we set a buy alert.7:06We set an alert. We said, "Listen, we7:08are a buy." We told everybody we were7:11going to do it. Then we set the alert7:12saying we're doing it. So, we gave7:14everybody in the alpha report a heads up7:15of what our strategy was going to be. We7:17said it in the course member live stream7:18and the alpha report. Then, we actually7:20put six figures on it. Like if we say7:22we're gonna do something, we like to say7:25our word is as good as gold. And so if7:27you want to be part of that, join us7:28over at reinvest one.com. Remember, you7:30pay once. You get lifetime access to7:33everything. The alpha report, the uh the7:36portfolio transparency, the private live7:38streams, all nine courses, the agentic7:40blueprints, the research terminal, uh7:43the stocks terminal, the homes terminal,7:46you name it. Go to mekevin.com and check7:48it out. But anyway, let's continue here.7:50So there are negative tail risks and the7:52Fed needs to think about financial7:54stability risks. Think about what just7:56happened today. I mean it's entirely7:57possible that somebody went bankrupt7:59today uh on on getting liquidated this8:02morning that potentially one of the8:04reasons we saw this collapse in the cues8:06here was because somebody got liquidated8:08and there are rumors circulating about8:10you know how a small hedge fund much8:12like Leopold could have gone bankrupt. I8:14joked on Twitter which you can follow me8:16there at realme Kevin onx. Uh, I joked8:19that, uh, hey guys, it sounds like we're8:21about to meet the great Leopold8:24the second, except I pronounced it the8:27great Leo Fold II. Anyway, that's just8:30me being, you know, meet Kevin. But8:32anyway, uh, the Fed needs to think about8:34financial stability risk. That this does8:36not sound like a guy who's like, dude,8:37we are way behind on inflation. We need8:39to hike more. This this sounds like a8:41guy who's very, very cautious about8:43potentially going too dang far. So let's8:47take a look at the rest that we have8:48here. So his speech right here, Kevin8:50Walsh will make judgments about October8:52and and December at those meetings.8:55Right now we have structural growth, an8:57investment surge. Remember, the Fed8:59can't do anything about an investment9:01surge. This is just another way of9:03saying, "Hey, there's nothing we can do9:05about that right now." He's trying to9:07talk down inflation expectations. It's9:10exactly what he's doing. Oh, there we9:11go. I've got the computer to where I9:13could actually pop it open right now.9:15Sorry, I was a little preoccupied there9:17for a hot little minute. Uh here we go.9:20Look at that. Look at those inflation9:21break evens. Look how stable that is.9:23And I want you to see the beginning of9:25the year. So January was really this9:28surge right here. And then of course we9:30went to the war. Uh then when we had a9:32ceasefire, things fell. This right here,9:35that peak, that's when wars got forced9:37to hike. We don't have that peak9:39anymore. And as long as we don't have9:40that peak, I actually think the odds are9:43you might not see a hike at all this9:47year. And Williams has already hinted9:48that we might not see a hike at all in9:502027. And think about how bullish that's9:53going to end up being for the economy,9:55the market broadly. Oh my gosh, it's9:58going to be euphoric. But anyway, we'll10:00be meeting a couple more times this10:01year. Those will be crystallizing10:02moments, crystallizing what's happening10:04to output, employment, inflation. Look10:06at that. He's clearly signaling we are10:09now putting employment first because we10:12are worried that AI is going to crush10:14jobs. People don't believe me when I say10:16this, but all you have to do is study10:18history. And frankly, when I say study10:19history today for a lot of people, and10:21there's nothing wrong with I mean just10:22ask your AI, okay? But usually10:26employment from a new innovation uh10:29comes in a U-shape. This is actually10:31very problematic, but it's quite10:33important for you to understand.10:35unemployment. Uh so you get a new10:37innovation, right? So uh you get some10:39kind of new innovation moment, the steam10:41engine, whatever. Uh initially people10:44adopt it out of experimentation and10:46curiosity. Is this actually going to10:48make money? Can this really replace10:49jobs? Once people get to the oh my gosh10:52yes this can replace jobs which we're10:55just now getting to with AI dude coding10:59you know that was that was earlier this11:00year you know now you need to be like an11:02AI engineer who can actually11:04infrastructure build anyway just coding11:08in general it's almost not even11:09happening anymore for coders uh video11:11editing AI is doing it emails AI is11:14doing it web design AI is it's scary but11:17anyway uh then people adopt it you You11:20can actually see some hiring where it's11:21like, "Oh, we need some steam engine11:23engineers or whatever, AI engineers,11:25whatever." And then people adopt it and11:27they're like, "Oh my gosh, we can11:28actually cut so many damn jobs." And11:31then you have this like extended U. I11:34probably dropped that too soon over11:36here, but you tend to have this extended11:38U where so you initially get a ramp of11:41hiring. That's kind of where we are now.11:43Then you get this extended U usually11:45which is recessionary because the new11:48innovation is deflationary and a lot of11:50people get laid off. You know maybe this11:52is kind of where the break even11:54employment rate is and eventually you11:56create new jobs and you'll net create11:59more jobs than we had before. Like this12:01will be way higher than this. We'll have12:03more productivity, more prosperity,12:04everything will be better there. But you12:06might have to go through a period of12:08hell first. Uh, and that's one of the12:10reasons I've been so anal about12:12stressing like look, I'm bullish that12:14we're going to have another euphoric12:15run. There's time left in this party.12:17We're buying the dip. But I'm also of12:19the mindset that like, pay down your12:20debt. You know, even people that have12:22like 2.9% mortgages or 4% mortgages, I'm12:25like, no, man. Pay down your debt. You12:27know, it's just not worth it right now.12:28Like I I I don't I don't want debt. I12:31also don't want to be a lender right12:32now. In fairness, we did just actually12:34reinvest like just two days ago. got an12:37email from the Department of Real Estate12:38and they're like, "We're planning to12:41approve you to be a lender in November12:45of 2026." And I'm like, "Ah, that's12:48cool." Like, I'm just going to hang that12:50on the shelf. Like, we'll put that on12:51the tool belt because kind of what I12:53think is the time to really get into12:55lending. Okay, this is between you and12:56me. Don't don't tell anybody the12:58strategy because this is our strategy to13:00make some money, you know, if poop hits13:02the fan. Okay, but between you and me,13:05when we're in hell, rates are going to13:07go to zero. And you know what's going to13:09do really damn well in that business? #13:12no guarantees. This is not a promise.13:15Lending.13:18You got to get your ducks in a row.13:20Before, you know, people were like, "Oh,13:22you got lucky." Isn't luck when13:25preparation meets opportunity?13:29Man, that was corny.13:31turning into the old dad. Ah, Fed War13:36says, "Since September's FOMC, the world13:38has broadly conformed to our13:39expectations." See, yes, it's right13:43here. Their expectations.13:46Yes, that's right. And that was since13:49the September meeting. In other words,13:52hey, since the September meeting, we13:55have conformed to his expectations. He13:58literally bluntly just bailed out the14:01markets and bluntly told you that is my14:04expectation.14:06He just told us this. This is it's like14:09it's right there.14:12Uh okay, that's great. That's fantastic14:15news. Okay, that was the Treasury14:16official before him. Investment surge is14:19the most important thing happening in14:20the economy right now. AI is going to14:21hit the demand side of the economy14:24before the supply shock. That's14:26inflationary. Don't believe in saying14:28what I might do in meetings for the rest14:30of 2026. Don't prejudice meetings. AI14:33will help central banks have confidence14:34in data. Their task forces are going to14:37give them confidence in maybe a lower14:39inflation rate that they just sort of14:40pull out of their butt. AI will change14:42the real economy, but in the near term,14:44the impact on employment is uncertain.14:47Okay, there's your risk. That's your14:49tail risk. That is the red flag. Okay.14:53Task forces. The US is investing through14:55private sector in new technologies. The14:57Fed does not try to figure out who is14:59right or wrong. The Fed needs to think15:00about financial stability. There are15:02negative tailside risks that15:04policymakers can do something about. In15:06other words, don't destroy the labor15:08market. It is already weak enough. Like,15:10yes, it is positive, but it's it's still15:12weak.15:1475% of Fed staff does not work on15:16monetary policy. We got to work on15:18culture. We're not going to give you a15:19hint about the October meeting. He gave15:21plenty of hints. Okay. Fed chair needs15:23to be uh the head of all parts of the15:25Federal Reserve. Institutional15:27credibility is really important. He15:28already told you the expectations are15:30aligning with what they wanted. I'm not15:33in the legacy business. I'm trying to15:34get policy right. I'm proud that Vulkar,15:37Greenspan, and Bernani left the Fed with15:39more institutional credibility. Oh,15:43he just left OUT POWELL.15:46OH, that is a slight on Powell. I mean,15:50he's been dunking on Powell for a while15:51in credibility. So, but I mean, that's15:53pretty damn blunt. You literally15:55purposely left Powell out of that list,15:57dude. Those meetings got to be awkward.16:02Wow. You know what we ought to do is we16:04ought to check out what the odds are16:06right now of one hiker.16:10Yes. So, uh, I've I've talked about this16:13before pretty pretty bluntly on the16:15channel, but I believe that, uh, there16:18is a real potential we only end up16:21getting one rate hike, uh, from the16:23Federal Reserve, and I think those odds16:25just went up, or at least they should,16:28uh, following this. So, what we want to16:30look at is we want to go to here.16:34Uh, Fed maintains for October. That's16:36fine. And what we need is Kalshi um rate16:41hikes this year. Okay, that's the one we16:45need. We hop in over here and exactly16:48one right here, 16%.16:54Ah, that one's looking juicy after this,16:58especially with this alignment on16:59expectations. Dude, that payout could be17:02nice. I like I'm probably gonna buy this17:06or more of this even. Uh because17:10I don't even need to ride this to the17:12end. I just need to ride that through an17:15Iran deal. So like I've previously owned17:17this. I've gone in and out of this one,17:19but I want to buy more like right now17:23because if I go to this expectation17:26sheet, he told us since the meeting, the17:30world has aligned with their17:32expectations. I mean, these are he's the17:34guy who's dropping us hints. It's like17:36the hikes comment that he had at Jackson17:39Hole, right? I don't know, man. That's17:41juicy. I mean, no guarantees, okay?17:43like, you know, not like, oh yeah, this17:46is financial advice or whatever. But,17:48uh, if you do want to make bets,17:49remember, you could always, uh, head on17:51over to Kshi on what you think is going17:54to happen with the Fed hikes. Uh, with17:57call prediction markets, we don't like17:59to say the betting markets, but anyway,18:02if uh, you sign up for Koshi and you18:03make your first trade, you get a free18:05$25 if you use this code,18:07kshi.com/r/meet.18:10You can also scan the QR code. They are18:12a paid sponsor of the channel. You could18:14use code meet Kevin when you sign up.18:16But honestly, I'm just going to go in18:19there and buy some more on this right18:21now because the more I read this and I18:24don't know it it could be delusional,18:26right? But I again I don't need to hold18:29this to maturity. I just need to flip18:30out of this on like a double. So I'm18:33going to go into the exactly one. Yes.18:37I don't know, put in like a few hundred18:40bucks and uh just go order my fill.18:44Okay. Yeah, this is this is their their18:46limits. You put in 200 bucks. Okay.18:48Yeah. Yeah. Yeah. 500 bucks. I don't18:50know. Somewhere around there. So, I'll18:52you know, I'll put in we'll put in18:54another 200 bucks over here. There we18:56go. All right. Cool. So, um19:00I'm pretty excited about it. We we'll19:04see where it goes, but you know, I'm I'm19:07jumping up and down a little bit on the19:09inside that these hints from the Fed19:11were a pretty clear bailout move and19:14they kind of doubled down on Waller's19:16point of view of like, oh yeah, you19:18know, we uh we're uh we're we're doing19:22good. Expectations are stable. So19:24anyway, nice little evening talk. Join19:26us for the Alpha Report tomorrow19:27morning. That's only in like 6 hours. uh19:30at uh meet kevin.com or reinvest.com,19:34whatever you want to go to. Links in the19:35description as well. We'll see you all19:36there. Thanks so much. Goodbye and good19:37luck.19:37>> If you like that video, check this one19:39out. I think you're going to love it.19:41>> Why not advertise these things that you19:43told us here? I feel like nobody else19:44knows about this.19:45>> We'll we'll try a little advertising and19:46see how it goes.19:47>> Congratulations, man. You have done so19:49much. People love you. People look up to19:50you.19:51>> Kevin Pra there, financial analyst and19:53YouTuber. Meet Kevin. Always great to19:55get your take.
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